Active trailing drawdown plans
The active trailing drawdown limit works by trailing the gains in your account value. Since this is an active drawdown, it will trail to the highest point of your unrealized gains (open positions) during any given trade. If your account balance (realized or unrealized) hits the active trailing drawdown during the qualification or during the initial phase on your funded account, you will be disqualified from the account.
Note, if you have hit the profit target and passed your qualification, but want to improve your daily consistency rate, the active trailing drawdown will remain in effect.
Here are a few examples with the $100K Gold Account. Keep in mind:
Example A: You begin day one of your new Gold account with $100,000. You enter a trade that immediately goes against for you a loss of $500. The trade never had an unrealized profit. Since your highest unrealized account value is still $100,000, your trailing drawdown account balance remains $97,000.
Example B: You begin day one of your new Gold account with $100,000. You enter a trade that quickly turns into $100 of unrealized profit, but before closing the trade, it turns against you. You close the trade for a $500 loss, meaning your realized account balance is $99,500. During the trade, your highest unrealized account balance was $100,100. This means your trailing drawdown account balance has increased to $97,100.
Example C: You begin day one of your new Gold account with $100,000. You enter a trade that quickly turns into $300 of unrealized profit. It drops some and you close the trade for $100 profit, meaning your account balance is $100,100. Your highest unrealized account balance was $100,300. This means your trailing drawdown account balance has increased to $97,300.
End-of-day trailing drawdown plans
The end-of-day trailing drawdown limit works by trailing the gains based on your end-of-day account balance (5 PM EST). If your account balance (realized or unrealized) hits the end-of-day trailing drawdown during the qualification or during the initial phase on your funded account, you will be disqualified from the account.
While the end-of-day trailing drawdown account value will be based on your account value at 5 PM EST each day, it may take several hours to correctly be reflected in your Rithmic account. Beware of trading during this time period since you may be disqualified if your account balance is below your new trailing drawdown account value once updated in Rithmic.
Note, if you have hit the profit target and passed your qualification, but want to improve your daily consistency rate, the end-of-day trailing drawdown limit will remain in effect.
Here are a few examples with the $100K Sapphire Account. Keep in mind:
Example A: Throughout the day, you have various swings in PNL, at one point you have a realized profit of $2,000, but you end the day with a profit of $1,000. The end-of-day account balance is all that is used to calculate your new trailing drawdown account value. This means your new trailing drawdown account value is $98,000. If at any point during the next trading day, your account value (realized or unrealized) hits or drops below this drawdown, you will be disqualified.
Example B: Throughout the day, you have various swings in PNL, at one point you have a realized profit of $2,000, but you end the day with a loss of $1,000. The end-of-day account balance is all that is used to calculate your new trailing drawdown account value. However, since this account balance is lower than the account balance to start the day, this means your trailing drawdown account value will remained unchanged at $97,000. If at any point during the next trading you, your account value (realized or unrealized) hits or drops below this drawdown, you will be disqualified.
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